Workers across the UK are set to receive their biggest pay rise in a decade, according to the Bank of England.
As reported by This Is Money, average salaries are expected to finally grow above inflation and rise at the fastest pace since the 2008 financial crisis.
Pay is expected to rise by an average of 3.1% this year; an increase on the 2.6% rise seen in 2017.
Staff shortages and an increase in the minimum wage are thought to be behind the country-wide pay rise. More companies now offer staff at least the National Living Wage, which for over-25s is £7.50 an hour and is likely to rise again to £7.83 from April.
The increase in wages would be the biggest in the UK since 2008, when average salaries went up by 3.5% in a year.
Today’s wage predictions from the Bank come from its latest survey of private sector employers spanning 386 businesses and 845,000 UK-based employees.
And it’s good news for hospitality staff working in hotels and pubs as they can expect a 3.9% pay rise this year, but those in the business services sector will be disappointed that they’re looking at lower salary rises this year of around 2.5%.
Those in the construction industry, however, look to be the only sector which won’t see a pay increase, amid falling rates of work since the Brexit vote.
The Bank have been looking for signs of pay pay growth in order to justify raising interest rates from the lowest level in a decade. Last week, the Bank of England announced that interest rates are likely to go up again in May.
Howard Archer, chief economic advisor at EY ITEM Club, said: “The Monetary Policy Committee (MPC) will highly likely see the findings of the February Bank of England’s regional agents report on business conditions as supportive to the more hawkish stance that they adopted at their February meeting.
“The MPC has highlighted rising pay pressures amid a tight labour market as one of the key factors in the likely need to raise interest rates over the coming months.”
If you are struggling with debt, Money Advisor may be able to help. Find out how we can help you reduce your repayments and advise on a range of financial repayment options. Contact us today for expert, confidential advice with no obligation.View all Posts